Intel Seeks Visibility in Cloud Service Market

NEW YORK -- Intel is making a concerted effort to get traction among cloud customers -- an area where the company already dominates, but is seeking to further entrench itself.

Intel on Wednesday announced a new initiative aimed at the cloud space. The new “Powered by Intel Cloud Technology” program purportedly aims to improve customer experience and value as well as the company’s cloud service capabilities.

In an emailed exchange, an Intel spokesman said it has partnered with 16 leading cloud service providers who have, when combined, in total $3.5 billion of cloud revenue. Those partners plan to provide a service that allows their customers to get a sense of the hardware behind their Intel-based cloud technology. Intel spokesman explained that such a brand visibility is important, just as drivers of a car want to know what kind of engine runs inside of it.

Intel’s new program helps communicate differentiation, Intel claimed, and it improves service performance -- although the company failed to offer specifics. Intel promised it will also improve reliability and security, thus assuring that customers get solid return on investment. The program includes Intel’s integrated Cloud Finder online search engine, which enables customers to find companies that provide cloud services built on similar Intel technology.

Charles King, president and principal analyst at market research firm Pund-IT, said in an interview with EE Times that Intel’s new program came out of cooperation between Intel and Amazon. “You could call this arose from a very successful experimental collaboration with Amazon,” he said.

Building a window into the cloud As for how this program helps differentiate Intel from its competitors in the cloud market, King indicated that there was little competition Intel needs to differentiate itself from as it stands. “I’m not quite sure that there are any competitors doing anything similar to this,” he said. “I think a program like this is necessary because in highly virtualized x86 cloud service environments there are choices that customers can make regarding infrastructure components, the amount of memory, the kind of storage components involved, etc. This program allows customers to figure out what kind of service and what kind of components they need to sign up for.”

Intel may, however, be looking to protect itself from new competition emerging as a result of cloud companies running ARM-based servers. King, however, dismissed that possibility, saying he is not high on ARM servers. The fact remains that new companies are moving into the cloud space and a fair amount of disruption is emerging from different areas of the cloud and server markets.

There is a disadvantage to not having a certain level of transparency of this kind, according to King. “On the down side, if businesses go into cloud services without an exact idea of what kind of services they need, they can run into some serious disappointment, which is really not good for anybody,” he said. “Intel is in a literal sense attempting to build a window into the cloud, which allows everyone to understand what’s going on in a much clearer and more intelligent manner.”

As for how this will impact the future of cloud services, King said that if the program works ideally, as Intel intends it to, it should help cloud services be more predictable and more transparent in a way that should benefit everyone involved. That includes the customers, he said, but also the cloud service providers involved in the program as well as Intel itself.

Intel explained that cloud service providers need to handle a variety of workloads their customers have.

For instance, customers may have simple web hosting but not know exactly what’s inside. The variability of what the customer gets could be up to 60%, Intel said. The cost of using the service may go up compared to what a customer would have paid if better hardware was available. This program is going to expose those features so that the user is able to make more informed decisions.

Intel CPUs power 90 percent or more of the cloud today. Instead of promoting sales of high-end CPUs, Intel said that the new program’s goal is to expose the instances of high-end and lower-end hardware so that people who buy it are aware of the technology they are going to use.

You could see the rationale behind what they are trying to do: harness Intel's old comparative advantage and try to copy it to the new cloud/IoT world. The world has changed though as there are many players knowking on the door of cloud computing and IoT. Intel can no longer claim the high profit margins they could do in the past. A heavy branding exercise like this does not make sense anymore as it will inevitably make their products/services less competitive. Their cash kitty can only take them so far... my 2c anyway.